Bitcoin (BTC) price is still 4.4% off its August 23 high of $ 50,500, causing some traders to wonder if the local high marked the end of the most recent 34-day bull run .
Even with the current correction, the derivative data and the maneuvers of professional investors do not give rise to any bearish signals.
Bitcoin price in USD at Coinbase. Source: TradingView
On August 24, noted technical analyst John Bollinger suggested that Bitcoin price could be lowered in the short term. A pseudonymous market analyst named “CryptoHamster” shared a similar bearish outlook based on analyzing a technical pattern called the ascending channel.
Bearish news from stock market regulation may also have dampened investor interest, and this week the UK’s Financial Conduct Authority (FCA) released a regulatory notice against the Binance exchange.
In accordance with this week’s regulatory measures, the exchange has been asked to remove its live advertisements and promotions on Binance’s website and social media.
A bullish trend can be seen on the futures markets
To assess whether professional traders have become pessimistic, analysts should watch the futures premium, also known as the “base”. This indicator measures the price difference between futures prices and the regular spot market.
The month-long contract should trade at an annualized premium of 6% to 14% in healthy markets as sellers charge a higher price to defer settlement, creating a price differential.
Huobi 1 month futures basis. Source: Skew
Notice how the indicator has improved from a neutral to declining annualized premium of 4% on August 19th to a healthier level of 9%. This shows that the metric is moving in the opposite direction of the zone in what would be considered bearish.
The long-to-short ratio of top traders is still bullish
To effectively measure how positioned professional traders are, investors should monitor the long-to-short ratio of top traders on leading crypto exchanges. This metric provides a broader view of traders’ effective net position by collecting data from multiple markets.
Top trader BTC long / short ratio. Source: Bybt.com
It’s worth noting that exchanges collect data on top traders differently as there are several ways to measure a client’s net exposure. Therefore, any comparison between different providers should be based on percentage changes rather than absolute numbers.
Both OKEx and Huobi showed an increase in the long-short ratio of the top traders, suggesting that they either closed short positions or opened long positions, which is a bullish move. Binance was the only exception as the indicator fell, suggesting some pessimism, but the variation over the past few days has been insignificant.
Options markets are slightly bullish
The 25% delta skew compares similar call (buy) and put (sell) options side by side. It becomes positive when the premium for protective put options is higher than that of similar risk call options.
The opposite is true when market makers are bullish and this causes the 25% delta skew indicator to go into negative territory.
Deribit Bitcoin Options 25% Delta Skew. Source: laevitas.ch
The graph above shows that there was some downward movement prior to July 19th, but the Bitcoin options markets have turned neutral since then. Furthermore, there is no evidence that professional traders are increasingly concerned about a possible drop in prices as the 25% Skew indicator remains near zero.
Both the futures and options markets are showing investor confidence despite worrying technical analysis and uncertain regulatory scenario.
As a result, according to the derivatives markets at least, dips are hot to buy.
The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph. Every investment and trading movement involves risks. You should do your own research when making a decision.